Last week, Charles Schwab announced that they plan on moving “a significant number of San Francisco-based jobs” out of the state over the next three to five years. Charles Schwab’s San Francisco roots date back to its founding four decades ago and the firm was the Bay Area’s 47th-largest employer in 2013. The company employs almost 2,700 people in the region out of a company-wide workforce of 13,600. Observers close to the situation blame the city’s extreme payroll tax and high cost of doing business in California as the reasons for the company’s exodus.
California’s abundant resources, ideal climate, and excellent higher education system should make it a premier location for businesses around the country and the world. Instead of attracting world class companies, California’s highest-in-the-nation taxes and excessive regulations are driving businesses like Charles Schwab to other states, taking thousands of jobs with them.
This is not the first time the state has seen prominent companies moving jobs out of California. Chevron, whose California roots go back more than 130 years, has recently announced that they will be moving up to 800 jobs out of the Bay Area to Texas. Campbell Soup announced that they would be closing their Sacramento plant and moving over 700 jobs to other states. Boeing announced last September their plans to shutter a massive Southern California jet assembly plant and lay off nearly 3,000 workers starting this year.
Last year, Chief Executive Magazine’s annual ranking, based on a survey of 650 chief executives on taxation, regulation, workforce quality and living environment, ranked California 50 out of 50 for the eighth year in a row. California also received an “F” grade in January from the Kauffman Foundation in a survey of 6,000 small businesses across the country. The Tax Foundation ranked California 48th worst on business taxes. Our state holds the highest sales, personal income, and gas tax in the nation. Those deterrents, coupled with the highest corporate tax rate in the west, are the reason why California has one of the highest unemployment rates in the nation.
As a financial advisor in California for 18 years, I have witnessed firsthand many of my clients and their businesses move to other states to escape California’s insurmountable tax rates and anti-business regulations. We need to implement policies that keep our businesses here and allow every Californian the opportunity to become a vital contributor to our economy.